In what could be among the biggest steps toward fighting climate change, Occidental Petroleum’s carbon capture unit, 1PointFive, inked a deal with tech giant Microsoft on Tuesday for 500,000 mt of carbon dioxide removal credits over six years. The deal represents part of Microsoft’s aggressive target of reaching carbon negativity in 2030.
1PointFive specializes in carbon capture, utilization, and sequestration. This occurs under the umbrella of Occidental Petroleum, which has interests in both the oil and gas sectors. Microsoft’s partnership points to a budding trend in corporate responsibility, one where large firms are leveraging carbon credits to offset their environmental footprint.
Still earlier this year, telecom heavyweight AT&T also pledged to buy CDR credits from 1PointFive as part of its roadmap to carbon neutrality throughout its global operations by 2035. Such credits can be thought of as tradable permits that allow companies to offset their GHG emissions through activities that ensure net CO2 removal from the atmosphere.
The mechanism of carbon credits is quite simple yet very effective: every credit stands for one metric ton of carbon dioxide removed or avoided, or, equivalently, other greenhouse gases. It is through this termed market mechanism that financing is pumped into technologies such as carbon capture and storage—technologies that form the center of the challenge of global warming.
The forthcoming facility of 1PointFive, currently under construction in Texas, will be key to meeting Microsoft’s commitment. Once operational, STRATOS is expected to capture up to 500,000 metric tons annually of carbon dioxide. That would be an enormous step forward for technology related to carbon capture and also place Occidental Petroleum at the heart of the carbon credit marketplace.
Such a partnership between Microsoft and 1PointFive is more aligned with the larger environmental strategy: not just to become carbon-negative but to innovate sustainable business practices throughout the entire supply chain. In buying CDR credits from 1PointFive’s first-of-its-kind STRATOS facility, Microsoft offsets its emissions while helping to set up or maintain critical carbon capture infrastructure.
The partnership is also a testament to the rising prominence that corporate partnerships are going to play in really moving climate commitments forward. Companies like Microsoft and AT&T are making serious commitments toward their carbon footprints, and by doing so, setting examples for others in the industry and leading the world on a low-carbon economy pathway.
Looking to the future, efforts such as these make for a strong case for how carbon credits should bring about real change in environmental stewardship. In enabling companies to sponsor projects that take CO2 out of the atmosphere—as 1PointFive and its STRATOS facility do—the carbon credit marketplace will be key to accelerating the shift toward a more sustainable future.
In short, the securing of a supply deal with Microsoft for CDR credits by Occidental’s 1PointFive marks a very monumental turn toward taking corporate environmental responsibility to a different level. In the wake of an ever-increasingly loud call to reduce climate change, such partnerships highlight the power of collaboration regarding the resolution of one of the most daunting challenges facing our generation.
